Magna E-Car Systems: A Hybrid-Electric Success Story

5/8/12Follow @XconomyDET

In late March, the Center for Automotive Research (CAR) announced that it had decided to cancel its 2012 Business of Plugging In (BPI) conference, one of the biggest annual confabs dedicated to electric vehicles in the nation. The first Business of Plugging In conference was held in 2009. According to its website, the 2010 conference drew 700 attendees, was covered by a plethora of media outlets including the New York Times and CNET, and its keynote speakers included the president of OnStar, a U.S. Senator, and top executives from Ford and GM. So, two short years later, what happened?

“The goal of BPI is to highlight the challenges and opportunities of creating a viable [electric vehicle] business model—a challenge that continues to create problems for many PEV start-ups and early products,” the cancellation press release stated. “CAR sees this challenge—and yes, even opportunity—continuing, and is actively researching the topic. However, many of the key stakeholders in BPI indicated they wished to instead focus efforts on technology development.” Ouch. (And something that shouldn’t have come as a surprise, perhaps.)

But while others in the electric-vehicle sector may be struggling with creating a viable business model, auto supplier Magna E-Car Systems—a partnership between Magna International, an Ontario-based company with American headquarters in Troy, MI, and the Stronach Group, a racetrack management company that spun out of Magna International—is thriving. It recently held the grand opening for its newest facility, a manufacturing operation in Grand Blanc, MI, that already employs 100 and is expected to grow.  “We continue to have an exciting market and the technology is hot,” says Kevin Pavlov, Magna E-Car Systems’ CEO.

The 66,000-square-foot facility, a vacant building the company began converting a year and a half ago with the help of an American Recovery and Reinvestment Act grant, will produce components  for the Ford Focus Electric, the Fisker Karma, and other global customers. Magna E-Car Systems now has 700 employees working at four facilities in North America and two in Europe making electric and hybrid vehicle parts for some of the world’s leading automakers.

Business is good, Pavlov says, because the auto industry is being compelled to find better solutions in light of new emissions requirements and Corporate Average Fuel Economy (CAFE) standards. And despite ominous signs like CAR canceling its biggest electric-vehicle conference and uncertainty over whether electric cars like the Chevy Volt will ever achieve mass adoption, Pavlov says consumers are also driving the growth of the hybrid-electric market, though not in ways you might immediately think.

For many years, Pavlov explains, people didn’t feel the need to connect with their combustion-engine drivetrains. Then, starting in the 1970s, consumers began to … Next Page »

Sarah Schmid is the editor of Xconomy Detroit. You can reach her at 313-570-9823 or sschmid@xconomy.com. Follow @XconomyDET

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