XL Hybrids, With New D.I.Y. Approach, Gears Up to Go Beyond Vehicle Retrofits

11/7/11Follow @gthuang

If you want something done right, the old saying goes, do it yourself. That’s exactly what XL Hybrids, a Boston-based transportation tech startup, is up to these days.

Despite a thin layer of gloom that pervades much of the cleantech industry, XL Hybrids is advancing in its quest to make commercial vans and trucks greener and more fuel-efficient. The two-and-a-half-year-old company is announcing today it has appointed Richard Canny, a longtime Ford Motor exec and electric vehicle expert (former CEO of Think Global), to its board of directors. Canny is based in the Detroit area and gives XL Hybrids some more gravitas and deeper connections in the auto industry. But there are a lot of other things going on under the hood at this ambitious startup.

“We’ve been hard at work not only in technology development but also in re-examining our market,” says Justin Ashton, the company’s co-founder and vice president of business development.

Part of that re-examination includes ending a partnership that XL Hybrids had formed about a year ago with U.K.-based Ashwoods Automotive, which makes a vehicle retrofitting kit. The plan had been for XL to adapt the kit for the U.S. market. But XL found the process was taking too long, in part because European vehicles are so different from American ones. “It made sense to work on our own,” Ashton says.

So, XL Hybrids is handling the technology for commercial fleets by itself now. “Our strategy has shifted to doing all systems development [ourselves] but working with tier-one suppliers for components,” Ashton says. That means employing large battery makers and established electric motor manufacturers, he says. “Our role is to build the hybrid architecture from the ground up.”

The architecture consists of a hybrid electric powertrain (for which XL has patents pending) that can be installed on either existing vehicles or new ones. It includes a lithium ion battery, electric motor, and control software. The computer-aided design drawing of the system (see left) resembles a space-age tuba, or maybe a Star Wars pod-racing engine, but the point of the powertrain is to store energy wasted in braking and reapply it during acceleration. XL says this results in about 20 percent lower fuel consumption and emissions for high-mileage city driving, in standard cargo vans (typically made by GMC or Chevy).

Starting in January, XL Hybrids is working with commercial fleet companies to start pilot tests of retrofit cargo vans in the Boston area. If all goes well, there will be a couple dozen vehicles on the road around New England by June, Ashton says.

But he emphasizes that there is a bigger opportunity. “This business is not about retrofit. Long term, it’s about creating a unique hybrid powertrain for a large market,” Ashton says. “We can do retrofits where they make economic sense for our customers. But we have a lot of interest from customers in what’s called ‘upfitting’”—putting the technology into new vehicles.

Of course, this could be a difficult journey for a small startup—but XL is focusing on a market it thinks it can handle. “The real challenge in transportation is finding your path to get your product to market. And dealing with some of the largest companies in the world with long product cycles,” Ashton says. “We don’t want to wait. You have to find a business model that is relatively capital efficient, that leverages existing infrastructure.” He adds, “Right now we’re focused on a niche within a niche. The commercial vehicle side is dwarfed by the consumer segment. Our strategy is to position ourselves.”

XL Hybrids was founded by a team of MIT grads in 2009 and has about 10 employees. The company has raised roughly $4 million from angel investors and the Massachusetts Green Energy Fund. It says it plans to raise more money next year.

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com. Follow @gthuang

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