Leo Motors, a Korean startup little known in the United States, has been quietly intensifying its efforts to build a beachhead in California to import and develop its electric vehicle technology, including a so-called zinc air-fuel cell battery that could dramatically increase the range of cars powered by electricity.
The U.S. auto industry may be struggling to stay afloat, but the Seoul-based startup believes there are fortunes to be made as drivers in the world’s largest car market shift to more energy-efficient vehicles.
Leo Motors CEO Robert Kang, who was in Silicon Valley in early December in search of partnerships, told Red Herring that the company wants to open an R&D center in the United States, likely in California. Mr. Kang said in an email that besides selling components such as batteries and motors to electric-vehicle makers, his company plans to eventually sell its own EV models to U.S. fleet customers, such as police or rental car services.
The U.S. market wouldn’t be the Korean company’s first foray abroad. In October, Leo Motors announced an agreement with the Philippines government to supply $15 million in EVs and components. As part of the deal, the Korean startup will supply more than 2,500 electric taxis and build an assembly plant in the Philippines.
The electric taxis, called E-Princesa, named after the Philippine city that will host the plant, will use lithium polymer battery packs, drive about 50 miles per charge, and max out at 30 mph.
Leo Motors also says it has developed several other electric models, including a sports utility vehicle called the S65 that can drive 250 miles per charge, but the company has not announced any large supply contracts around the other models.
But Mr. Kang said the company’s initial focus in the Unites States is selling EV components, a market that MDB Capital Group forecasts could exceed $25 billion in U.S. sales by 2012. Most of this market will come from hybrid-electric vehicles like the Toyota Prius, according to a November report by the investment bank.
Leo Motors claims to be on the cusp of several technological “breakthroughs” that “could improve even the highest-end EVs, including super cars such as the Tesla [Roadster].” One of those breakthroughs is a zinc air-fuel cell, or ZAFC, battery, which the company aims to commercialize by late 2009.
Using tiny zinc balls as fuel, the ZAFC acts as an on-board power generator that charges a car’s battery and extends its range. The price is less than 20 percent cheaper per watt than typical lithium batteries, said Mr. Kang, meaning EV makers would get more bang for their buck by investing in ZAFC rather than installing larger batteries.
Battery cost is a major hurdle for electric cars, accounting for between 15 and 20 percent of the total price tag for today’s hybrids.
Leo Motors isn’t the first to think of using ZAFC technology. It is currently used in small electronic items, like hearing aids, and in limited military applications. But no one has successfully commercialized the technology for broader use, said Sara Bradford, an analyst with market research firm Frost & Sullivan.
“My question is: does this startup truly have the manufacturing capability?” she said.
Ms. Bradford said manufacturing batteries is no easy task, even for big, established companies. Safety, testing and quality control add multiple layers of complexity.
Meanwhile, other companies besides Leo Motors have been working on automotive applications for ZAFC technology. They include the Livermore, California-based startup Power Air and Ann Arbor, Michigan, defense contractor Arotech.
Besides battery technology, Leo Motors is developing a wind turbine to be installed in vehicles to help power the electric motor and charge the battery. The turbine could reduce electricity consumption by up to 25 percent, according to the startup, by generating power from the wind currents whipping a car as it plies city streets.
The Korean technology company has also developed a “multilayer brushless” electric motor that the company claims improves efficiency and power but will have a price tag that is half as high as conventional electric motors.
Leo Motors was founded in 2005 by John Lee, the company’s current president and CTO. Mr. Lee developed the first passenger car in North Korea when he led the R&D center of Pyeonghwa Motors. Since then, he has developed more than 10 EV prototypes including passenger cars, scooters and utility trucks. Red Herring