EcoMotors Chief Don Runkle: “Electric Vehicles Are Not ‘Zero Emissions’”

Thank you very much for joining us.

Thanks, Craig.

Donald can see you.

And here’s, when
we get to the slides, you can just press that.

Oh, okay.

So Donald, you were the head
of engineering at
GM right, and
you ran lot of programs there.
The EV1 is probably
the one that most people have heard about.

I would say the Corvette probably
is more well known than the

we want but that’s …

I
mean in terms of green,
you know, green vehicles.
So you have experiences in electric and in combustion.
There is this assumption
that if we just had
electric vehicles on the road,
we would solve a lot of
our emission’s problems, you
know, as well as a
lot of the dependencies on foreign fossil fuels.

Is that a correct assumption?

Yeah, I would not say it’s not.
No, my experience come
from having lead the
EB1 program at GM starting the fuel cell projects.
Did the ultralight, which is
a 100 miles per gallon having been
on thermal combustion engine again, using
lightweight material and so forth.
And then, you know, basically
creating an advanced battery consortium
to improve batteries out
there and that has been helpful.

But typically, the issue
is the cost of, you
know, the moving payload
a certain distance.
And the EV1 was a
technical marvel in terms
of what it did in terms of efficiency and so forth.
But it was simply, unconscionably, too
expensive for anyone to
buy, even if wild
subsidies at GM was providing
unbeknownst to everyon.

And so there’s been gains
in terms of the improvements
in battery technology, and I
think they will continue to go
as your experience in the Electric
Bike, but you also have
to count the electricity and
if you are worried about carbon footprint
where the electricity is being
generated and how it is
being generated, and you know,
right now, around the
world basically electricity is mostly
coal-driven and that is,
you have to count in the equation, you can’t forget this.

I think many people here
may have watched the movie, “Who Killed the Electric Vehicle?”.
Was that you?

I am the guy that burned the Electric Vehicle.
I was at the General Motors went down the demise.

So Craig, why don’t you tell is a bit about your approach?
Your primary products
are electric motorcycles but you do other sports vehicles as well?

Yeah, we’re focused on motorcycles
right now and part of
it is for the exact reason he was just talking about.
It comes down to how
much, how far you can go with the battery and how much payload you can push.
So in our view
the only vehicles that really
make sense in terms of
the costnow .
We think cars; the
batteries are still too expensive
to get four passenger vehicle down the road.

So, we have really
focussed on getting the cost of the batteries down.
So we’re in the battery business as well.

What’s the cost of this
motorcycle compared to So,
this one’s $7995, so
we’re working very hard
to get motorcycles in electric
in parity with an equivalent
gas, gas right now.
So one, we have
just released different from this
called the Impulse is very comparable to a Ducati Monster.
For instance, and it is about the same cost and it goes about the same range.

And what has been the reaction?
Who is buying?
Is it the motorcycle enthusiast or
is it the types of people
who would buy a Prius?
You know those are safe.

Yeah, yeah.
Actually our newer products are
all going to motorcyclists, it seems like.
Then our initial products because they
were you know early in the space.
We’reoing more to the green
or the electric enthusiast, I would
say, but we are
trying to create products that
reach all the way from, you
know, the aspirational customer who
has never ridden a motorcycle
and said ‘hey, that looks like
fun’, all the way
up to the guy that’s already got
the leathers and the helmet and the license.

Don, maybe you can drive the Oh, okay.

You can see right there, what’s going on.
But just explain to us what you are trying to do with Hico Motors.

Yeah.

And last year actually
at Disrupt in September we
had the Vanote Kosola on
stage and he
talked about Hico Motors specifically
sort of an approach that
he thinks is, I don’t
think he’s invested in the electrical vehicle companies.
And I asked him why and
he mentioned you guys
as a preface to what you are about to tell us.

Yeah.
He has some investments in some
disruptive battery technology, which
is a good thing, but not in any of the cars.
This is just some of the
vehicles I’ve been involved with in
sort of my history all over
the place and from solar
cars, electric hybrids, motors
in the wheel, two-strokes, lean machine
which was a single wide vehicle,
100 mpg ultralight, what
could you do with ultralight, ultralighting
and so forth, and obviously a
lot of racing, but we
have some pretty outrageous claims for the engine.

I’ll show you in the next slide
a little video that will clear up how it works.
But basically an improvement
in efficiency of about fifty percent depending on the configuration.
About half, and that’s due
to the friction and heat rejection,
which is the two big bugaboos
of internal combustion engines
eight to go, and improving efficiency.

It’s about half the weight and
half the size, so we’re pushing
on a horsepower per pound roughly
for an internal combustion engine.
That’s about twice as good as what’s out there today.
And clean emissions, I’d
like to say we have the
lowest carbon footprint including electric
cars when you count
the fuel and all of
that stuff, so that’s always a
good place to be, and then
you have to have your
other emissions like hydrocarbon and
so forth, at legislative levels.

When you said count the fuel, when you count the.

Who is making the electricity, who’s making
the oil, and that sort of stuff.

So, if the power plant that provides
the electricity is based on
coal or something else, you have to account for that.

That’s 50 per cent is,
that’s true in the United States,
92 per cent in China, in France it’s 25 percent, you know, that’s the drill.
You can’t not count that.
You got to somehow, that has to play into the equation.
So, when I hear electric vehicles
are zero emissions, it’s just not true.
I mean, people can make the
claim like Carlos Ghosn at Nissan,
but it’s not true.

Do you make that claim?

No, but it’s…

Yours is pretty modest.
Even if you have the dirtiest coal, it’s still 92% more efficient.
So, it’s a lot easier to
scrub a plant than a
million vehicles, in our view anyway.

The other key and the thing
that typically gets in the
way of advanced technology is cost,
and that’s the little football on the right there.
So we’re lower cost because
of the less parts that we have.
This gives you some idea.
Opposed pistons, opposed cylinders,
so this is the
animation of how the engine
works that is different from today’s architectures.

Explain how this is different?

Today’s engines, basically the piston
pounds against the ceiling, the
head, and it’s four stroke engines.
Everyone that drove here today probably came over in a four stroke engine.
That’s been on the
king of the hill for a hundred years.

And so they see there is a lot of lost energy?

Yeah, the heat rejection they had.
Opposed pistons means the pistons
move at basically half the
speed of normal engines, piston’s
where most of the friction is in the engine, about half of it.
Ours run at half
the speed of the normal engine, so
We have about half the friction.
So those are the two big issues there.

The engine is perfectly balanced, has
electronic turbocharger to do
the the scavenging and make it
pass emission, so that’s a key element.
The other key role is shown in the next movie.
If you wanted, you might drive
a car that needs a 400
horsepower, so you could do
it with one of our engines that
has 400 horsepower or put two
two hundred horsepower engines in and flux the crankshaft.

This is a perfectly balanced engine
and basically the industry
knows if you could do
the stackable power, you could
get a 30% improvement in efficiency.
So you get about a
15% improvement in efficiency
in the fundamental engine and another
30% on the dual module,
and that’s what creates the high efficiency on that.

And so, that’s sort of the drill on that.
If you take a look at the
parts on the left
part of the screen, there is
a 300 horsepower conventional four stroke engine.
It is a world class engine.
I think that ones Navistar or
Cummins and that one has to be a diesel.
So then on the right is ours, 62 parts also 300 horsepower.

Again.
We don’t have any unusual material uses
pistons and connecting [xx] just like industry uses today.
So it leads to a
lower cost position, which sort
of brings me to this chart.
This is, the height of
the bars here is the
total cost, the green is
how much it cost to buy
batteries, the electric motor
and so forth; the bar on
the left would be 100
mile range 4 passenger, sort of, electric vehicle.

The next one is like the bolt.
The ATV would be a Prius-type vehicle.
What everybody in the
world today buys is basically either
the gasoline engine or the
diesel engine, which are the 2 lowest bars.
We put in our four
offerings, they are either our hybrids or our other ones.
And so this is what I call economic gravity.

When you have a new technology,
the savings and operating cost
has to be more than
what you, the cost of the technology.
It is not that it is
inferior and in the end of the day it doesn’t lie.
You could subsidize any, you
could pay me a 100,000$ to
buy something and I would
do it but but it doesn’t
last that long, and we’re looking
at mostly what to do
about all of
transportation, not the niche players.

I think there’s a lot of good niche applications for hybrids and so forth.

You know, I think
it’s simple because on stage, we
have innovative vehicle here.
It is Brammo motorcycle.
We have a Tesla covered up over there.
One of our start-ups is using it as part of their demo.
And what you’re saying though
is this is all
well and good, but in
order to make a real impact you’re
better off improving the internal
combustion engine, which still has a way to go.

Yeah, that would be our position,
because we are looking to,
you know, the huge traffic jam getting here from the airport this morning.
I mean So, the internal combustion
engine has been around for more than 100 years right ?
And the reason it’s
been around for 100 years, is it’s been the best.

Why didn’t you do this at GM?

Don’t forget, we didn’t think
up the engine, for one
bit, and this is a heavily patented engine.
But if you take a
look at, don’t forget that we
this country with electric cars and steam engines.
Then came along the 4
stroke engine which had
the same characteristics, has lower
cost, higher reliability, clean
enough on emissions and
so forth, reliable and more
efficient than the counterpart.

And so in a unsubsidized
fashion it became top of the hill, king of the mountain.
We’ve taken lot of shots on trying to knock it off.
The rotary engine came and went.
We had two strokes, came and went.
The gas turbans came and went.
Fuel cells we took a real hard shot at that a few years go.
At GM we tried 2 times on the electric car.

One was the Electro Chevette, if
you remember that vehicle, probably didn’t.
And then the EV1 that we
took another shot at it
because of batteries improved and electronics and so forth.
So, but again I
claim that this curb either
businessmen who need vehicles
to move goods and services
or people go to the market.

Every year they buy about 70
million cars and trucks around the world.
And those 2 bars, the gasoline
and the diesel are the ones
that they all keep in mind
the hybrid Prius has
been out for 11 years
now and it sold just under 2 million vehicles.

So Craig, what’s your response,
basically if I listen
to this, I come to
the conclusion that electric vehicles
are going to remain a niche, you
know, a niche part
of the market, as opposed to
a lot of the hype that we’ve
been hearing that this is
right around the corner, and is
going to start replacing other vehicles.

Our perspective is that
without players like us
that are leading the path
to parody with gas, so
that’s our goal, is that
when you go in and have a
choice, you can buy an electric or a gas.
That you can choose electric and
it ends up being dramatically less expensive over the live.
But most consumers, don’t do
the whole-life and go well: insurance
is less, maintenances is less, energy is less.

What they go is “How much do I have to write a check for today”?

Why is insurance less?

Partially because of the
lower part count, and partially
because of the initial
ones like cars are lower speed.
This one is 65 mph, so
you cannot go a 130 mph on this one.

And you call that a motorcycle?

Yeah, exactly.
And so, I think that’s big part of it.
So, our belief is that
cars will get there, batteries
will get there, if companies like
ours could push it,
you know, and our moral view
is, I have got 4 young
kids, and when they grow
I don’t want them defending oil fields.
I’d rather have them working on in electric vehicle plants.

Right If anyone has any question come
on up to the,the mike and I ‘ll calling you.

I think the right motivation,I was,was
been said here is you
get the parody, so that
you don’t need cost to get to be the issue.
Right now, it’s enormously expensive to
buy an electric vehicle and
all that so keep working
on the technology, that’s why I
cofounded with the US
Department of Energy, the USABC,
to help work on driving
battery cycle life up, power
density, energy density, and
overall cost down so that we could get the parody.

The little green barn of electric vehicles have battery.

So you haven’t given up on the electric vehicle?

I advised two big battery companies
today, so I’m a big
fan of it and I
think, we should continue to work on getting to the.

What’s the key there?
What’s the key technological achievement
that we need to get to, to
make it the viable?

Dollars for kilowatt hour.

It’s batteries.

I mean we made some good progress there.
It was made with
the undersecretary last week
at the department of energy
and there have a pretty
aggressive forecast on what
we’re seeing on battery costs so
that will be helpful, but they
are also still very far away,
keep in mind I mean a
gallon of gas is an
enormous, that 33 kil o
per hours, Just tell that.

when are we going to see your
engine in a car?

It will depend obviously on the
customer’s Two signed customers
now, one in China, one in United States.
I think both are pretty aggressive.

For One is
for commercial vehicle application, another
one is for genset application and
then also commercial vehicles What does that mean genset?

Genset for making electricity from
you know, gasoline or diesel or something like that Generator.

Generator…something.
If the power..
if the grid went down today I’m
sure the lights would come back
on because of some diesel sitting in the back yard here.

Right.

So I would expect
in the 2013 time frame.
We’re in the series B, we
have Klosar and Bill Gates as
our two financial guys
running or investing
in us, and we’re in the
middle of series B the development engine.
We’re on our sixth generation engine,
so this is not a power point engine, we got measured data.

How much have you
raised and the amount
that it costs to develop this
engine, how does it compare to,
you know, what it would’ve
cost to develop a
novel engine at GM?

Well it would..
.the
cost that we would
have would be …off by
a decimal point lower than
a normal automotive GM
or Ford or somebody like that.

Why?

I just think the efficiencies of
a small engine small company
very focused on what they’re
trying to do .GM
has things to do with other big companies.
So I think, generally, like
any start up you concentrate
your money and your people on
solving the problem, so to speak.
But, there was about 50
million dollars of non-dilutive
money put into it.

DARPA put about 25 million in
it for a military project
that they wanted to test
all their goals and
then there was other investments made
in the technology before the company
was actually found,this engine first fired in 2003.
So this is not ..

It’s been around.

This is not a powerpoint engine.
This is not something that we just sort of dreamed up last week.
This has been under development.
The company Eco Motors with
coastalthe series they investor
was in 2008 So, what’s that like
to have Vinod Khosla and Bill
Gates as your two biggest investors?

From my standpoint, I couldn’t ask for two better investors.
I think Vinod is mostly
interested in company building.
I’ve talked to this guy
every week on, “Have
you looked at this sort of technology?
We have an investment here.
Would that work on doing your inner cooling on your engine?
It has nothing to do with you but it is good at cooling.”

Investment and injection of company and stuff like that.
So, he’s unbelievably helpful in
thinking about what other things we could do, markets.
And, also I think very helpful in our negotiations.
You know, when negotiations get too tight, he says, “The hell with it.
We’ll do it And, then
Gates is, I think you
can’t get anything past him on
technology and so forth.

The reason I think he
invested us, he liked the low-cost idea.
He thought the physics were right
and liked the modular displacement
and the abilities to get this.

For instance if I could wave
a magic wand right now and
everybody is running this engine the
United States, we would
be importing no oil from the mid east.
That’s what a 50% improvement in efficiency will do.
So, with a carbon footprint lower
than a electric car, the ability
to significantly change the
fuel consumption, and transportation
is one of those unique things where
you take your fuel with you.

So, it’s not like you’re
home when the fuel comes to you, or something like that.
So I know that Tesla with these guys.
I am wondering when Elon Musk is
going to actually switch the rockets
in the Space-X to electric,
and so we’ll see how that is working on them.

I’m sure he’s working on it.

Sure, he’s working on them.
The airplane I flew on today will be electric someday.

So, we’ll take a question here.

Hi, my name is Edward Chin.
I have a question for each of you.
For Brammo, what the
future of electric bikes and,
you know, devices like the Segway
because I’m noticing in New
York, I live in New York, that
there are more of these battery powered
bicycles around.
Do you think there is a
space for that and for eco motors.

You mention that a lot
of the friction comes from
the piston engine.
So why did you choose to go
with a piston model, not
something like the wankel, or the rotary engine.

Of course we believe there’s a
huge market for electric,
2 wheel, 3 wheel.
We’re really focusing on power sports in general.
So it’s pretty much from the
NEV down because of the power to weight ratio.
We’re seeing sales take off.
f you read any of
the stats from the big analysts
they’re saying just in Asia
the 2- wheel electric market is
10’s of million of unit this year.

So we see a very bright future.

I think on your question
on the rotary and why pistons,
again pistons have one of
the best surface to volume ratio’s and they are also scalable.
So that helps us in the friction model there.
At GM we spend
about $300 million in rotary
engine we were one of the
people to buy the people to buy the license from NSU at the time.

My The founder of Eco
Motor which is Peter Hofbartran
a VW power train for 20 years.
He was at VW when
they NSU who had the rotary engine.
Chrysler bought the rotary engine.
Ford did also.
Mazda of course did.
At the end of the day,
it has too much friction and it simply doesn’t have the right power density.

And, it’s basically a failed
engine architecture if you look out there.

Many people have taken a wack.
Mazda did the best job
of actually bringing it out and having a product.
ou don’t see any basically in today.
The power density is
wrong, and frankly the
emissions level, because of the
sweat volume, some of
the technical stuff is just too hard
to deal with.

Well, thank you both for joining us,
I certainly learned a lot,
and I hope everyone learned a lot.
You know, we talked mostly about internet
companies, but there’s plenty
of disruption in other
industries as well and thank you for bringing that to our stage.

Great.
Thank you.

OK .
Thank you very much.
OK.
I’ll take that.

Thank you very much.
All right.
Next we have a
fireside chat with Michael and Keith Reboy.

Okay, all your bikes,
are they all plug in or do you need charger stations?

Yeah.
We’ve designed every bike so
that it’s any plug in a laptop, you can plug in the bike.

Okay, fantastic.
And, tell me a little
about how you guys maintain
that green environment minded credibility end to end.
What do you put into the material
analysis to make sure your batteries are green?

Yeah, essentially we evaluate
every vendor for their sustainability,
so for instance
our fenders are made out of
ground up battery case recycled
and the seats have carpet nylon.
And then the colored part
of the bike is actually recycled
polypropylene bottles, so, water bottles.

Okay, recycled bottles.
I mean, we had a bike
in the hall, I don’t know where it is.
Maybe, in my dream Mike
just drove it out
there

Mike Harrington has stolen
the Brammo Bike apparently,
and if you could bring it back, that would be wonderful.
So, can you tell us about what’s new for the company?
You guys have some
plans to expand from thirty five
employees here in Oregon.
Where are you setting up shop in the world?

Well, we’re opening an
office in Italy because a
lot of the components for motorcycles come
from Italy, we also
have Singapore and Hong Kong set up.
We are working on all of
Europe as well essentially as
well,so, we are mostly
a sales organizations there, but
we’re actually building for
Europe and Hungary so that
it’s very short trip to
the customers instead of shipping from US.

OK and that should reduce the carbon footprint of shipping.

Yeah, you want to build
the bikes as close to the
point of consumption as possible
for the sustainability factor.

OK, and on Main Stage
before, you were in discussion
with Don Runkle, who’s a
long time automotive VP of
engineering from GM now CEO of
Ecomotors, you guys were
discussing the fact that a lot of environmentalists
have perhaps little too much faith in electric vehicles.
He made a point that a lot of the world’s electricity is recycled.

When do you you think we’ll
start to see a tipping point
where electric vehicles are, you know, coming through on that promise of?

Yeah, the arguments about that you
have to burn coal to
generate electricity is absolutely
true, but it’s still 92% more
efficient, and at the
end of the day, it’s so much cleaner to go electric.
Doesn ‘t matter how you produce electricity.
The efficiency of a gas motor is 35%.
He’s trying to get it to 50%.

They haven’t been able to do it in a hundred years.
I hope he does it, ’cause
it would be great, but
electric is going kick its butt in terms of efficiency.

So, the biggest problem though
is you…one thing you
pointed out, a gallon of gas has 33 kilowatts.
Thirty-three kilowatts of batteries is bigger than a gallon of gas.

Okay.

Until those are equivalent,
it’s going to be a little bit of a challenge.
But for us, that ‘s why we chose motorcycles instead of cars.
It makes sense today, where cars,
we think it’s three to five
years off, because a Nissan Leaf
is still twice the price of a Sentra.
Our Impulse is the same price as the Ducati Monster.

So, we’re at parity
now, where we think cars are a few years off.

So, what are the models you’ve announced so far at the Inner Show?
The Impulse Yup, and also
the Engage which is the
first world reveal of
our patent around a gearbox
integrated into the electric motor
to increase the efficiency but
even more importantly to make it
twice as fun to ride, so
essentially gas bikes.

OK, how so?

Well,having a clutch and being
able to slip the clutch
and let the gas go is part of the excitement around that.

So it feels like a combustion.

Yeah, I mean you can pop a wheelie, you can burn rubber.
At the end of the
day the 28 million people that
ride motorcycles in the
US, they do that partially because of the fun.

Ok, so, I heard that
you guys had a lap record recently for electric?

Yes, so, we went to Infineon and they had the TTX-GP.

What is that?
What is that event?

It’s really a race that showcases
where technology is for electric vehicles.
So, we beat last
year’s lap times by several
seconds, and so every
year it’s getting a little bit better in terms of performance.
But also, the bike that we
have is one that you can actually buy next year.
You could win an Infineonand then
buy it in retail, so we’re pretty excited about that.

Can you tell
us a little bit about
this, like the inertia here, that’s
in the demo hall?

Yeah, so as an example, this bike .
The orange panels are actually all pop bottles.
All this black plastic is recycled.

Security, and I’m not kidding, almost just kicked me out of my own event.
“Sir you cannot, get off of that.”
And I said “I’m going really slow”, and then I said ‘hey this is my event”.
That got me no other safety.
And then I just left, right?
And the security guard is chasing
me down start of alley,
and I think I need to go hide in there.

You can go back with the helmet on and hide.

No, they were actually like absolutely freaking out.
This is so much fun.

It is, it is.

You know, I am going
to get off of this now.
When security comes, you guys got to “human-shield” me, okay?
Where do you want me to go?

Do a loop backstage.
First time I’ve been on a motorcycle.

Typical customers for you or…?
Who are buying these things?

They are.
I think anybody that believes
in the future tends to be,
you know, quick to jump on board
for this, so…The inertia is kind of like our beta bike.
You know, it proved the technology.
What we found was that
we had to improve the batteries
to get over a hundred mile range,
so we tried really hard to
find batteries that people made.

Nobody had it, so now we’re in the battery business.
And we’re calling it Brammo power.

Okay.
Could you guys ever, speaking of
the battery business, I mean, it
seams like the motorcycle market is
slightly more limited than something
like, just more general software IT business.
How big could a company like Brammo become?

Well, to put it in
perspective, you sell
50,000…

Got it, Greg?

Yep.
Fifty thousand of these a year and you’re a billion dollar company.
And Harley sells, you know,
500,000 bikes a year, 400,
you know, depending on the year.
So, you can see where
this is a, you know, five
to ten billion dollar company in five to ten years, you know.

The Harley of clean tech?

Well, that…you know, your
words, but, you know We
like that, so I think
the opportunity really gets much,
much bigger too, because our batteries are very unique.
So we’re seeing a lot of interest from other companies.
So the B2B side of our business….

What kind of companies are buying up your battery tech?

Well we’ve signed a bunch of
NDA’s, so just most of
the major motorcycle and ATV
manufacturers have shown
interest in Brammo, more around
the drive train, because we already have the motorcycles.

It ‘s a beautiful machine.
Thank you so much for spending the time with us.

Thanks.